One gold bug warns of a ‘human tragedy of epic proportions’

By Shawn Langlois

Universal/Everett

“All-time high” is the “we should talk” of the stock market. Three words that sound just fine at first, but ultimately lead to sweaty palms and shortness of breath.

In the former’s case, the anxiety is mostly unfounded. Good to know, considering the S&P 500
/quotes/zigman/3870025/realtimeSPX is on the verge of another, yes, all-time high. In fact, there’s a good chance it’ll happen today. Or at least on Friday, if Janet Yellen cooperates.

We should be used to highs by now. A few weeks ago, the S&P notched its 26th record this year alone. Not much excitement though. Instead, just mushrooming clouds of doom and gloom. Look no further than our call of the day.

The thing is, the market spits out new highs a whole lot more often than you might think. As in, one out of every 15 closes dating back to 1950. That’s about twice a month since the year Stevie Wonder was born. A total of more than 1,100 new all-time closing highs in just 64 years, according to Ben Carlson, who tackled the topic in his deep statistical dive on the “Wealth of Common Sense” blog.

Basically, just because the S&P is breaking into new territory, doesn’t mean it’s toppling over. It will, of course, but those frozen in the fear of new highs have missed out on spectacular gains already. Hedge your bets. Take some gains off the table. Add to your cash. Take a vacation. All of the above. Sure.

Just don’t get all queasy over another all-time high.

“There are any number of reasons for stocks to decline,” Carlson wrote. “But stocks don’t have to crash merely because they hit all-time highs. It’s perfectly normal.”

Or as financial advisor Nick Murray once explained: “If you think the market’s ‘too high’ wait ’til you see it 20 years from now.”

The quote of the day: “Go kill ISIS and leave us alone.” — The man in the tweeted photo below, protesting in Ferguson, Missouri.

The economy:Today’s slate of data isn’t just some stepping stone toward tomorrow’s Janet Yellen dove-fest. There’s some meat to it. Initial weekly unemployment claims showed a fall of 14,000, a sign that once again layoffs remain at a post-recession low. Existing-home sales and the Philly Fed manufacturing survey are coming up at 10:00 a.m. Eastern.

Hertz’s
/quotes/zigman/439823/delayed/quotes/zigman/439823/lastsaleHTZ time in the spotlight isn’t over yet, thanks to Carl Icahn. The stock, beaten up because the company pulled earnings guidance, rebounded after the activist investor disclosed an 8.48% stake. Icahn said shares are undervalued and he plans to seek a meeting with management. Hertz is up early.

The chart(s) of the day: Call it technical analysis for dummies. Greg Guenthner of the “Daily Reckoning” blog recognizes “most folks see technical traders as lucky market magicians,” dismissing it as witchcraft.. “We’re only human – and most of us desire predictability and absolutes above all else,” he said. “It’s no wonder so many investors have trouble shaking the buy-and-hold philosophy that has shaped their investing worldview.” With that, however, he offers a quick lesson in charting that even the fundamentals-driven investors should incorporate.

“If you open your mind and apply technical indicators to your fundamental ideas, I promise you’ll begin to rake in the profits that were once so elusive,” he said.

Here are the same two charts, with the first showing where you should be looking to buy a stock, and the second where you should sell. Seems simple and, well, it is, but that doesn’t mean it isn’t effective. Read the whole post.

The call of the day: I click through countless bubble calls each night. Almost for sport. Only the most colorful will do at this point. Like this from John Embry, chief investment strategist at Sprott Asset Management. “With the global economy now weakening virtually everywhere, this bubble-mania has a limited shelf life,” he warned. “And when it comes crashing down, it’s going to create a human tragedy of epic proportions.” Now THAT is how to drop a doom call. Of course, he’s a gold bug, and they tend to get a little dramatic. “Everybody knows timing is important, but I think in this instance you can be very early in positioning yourself for the outcomes,” he said. “However, you can’t be late.” Read his whole piece on King World News.

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Need to Know (NTK) guides investors to the most important, insightful items required to chart a course ahead of each trading day. Anchored by lead writer Shawn Langlois, NTK will sift through the fire hose of news, commentary and data, from traditional and non-traditional sources, and extract what’s most essential. You can start reading NTK here as it begins publishing at approximately 6:30 a.m. ET, or sign up here to get a version in your email box every morning at approximately 8:45. a.m. ET.